Eagle County real estate: More sales, less revenue

Waiting, waiting

Here’s a look at average days on the market for condos and townhomes in select areas of the Vail Valley:

Vail Village/Lionshead: 332, a two-year low.

Beaver Creek Village: 263, a two-year low.

Edwards/Homestead: 120, an increase from 2012.

Eagle/Eagle Ranch: 73, a two-year low.

Source: Slifer Smith & Frampton.

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EAGLE COUNTY — To hear Michael Slevin tell the story, the Vail Valley real estate has something of a split personality these days, and recent statistics support that view.

Here’s the good news: The number of transactions in the valley continues to increase, as does the speed with which property is selling. As of June 30, year-to-date sales are running ahead of sales completed in 2012, and homes in many areas aren’t spending as much time on the market as they did two years ago.

The bad news is those sales, in aggregate, generated less revenue than the first half of last year.

According to the most recent data from Land Title Guarantee Company, revenue generated from residential real estate sales — “sales volume” — is about $70 million less than for the first half of 2012.

The reason is that sales of high-end property is lagging behind 2012’s figures.

Dip in high-end sales

But first, a caveat: A relatively few sales can skew sales volume numbers significantly. For instance, there were 106 sales of “improved residential property” in June.

Of those sales, just one was for $5 million or more. That single sale accounted for 14 percent of the month’s sales volume.

Jim Flaum, president and managing broker of Slifer Smith & Frampton Real Estate, said the dip in high-end sales could be due to any number of factors, including uncertainty about the national economy. The currently bullish New York Stock Exchange could also be prompting people to keep their money in stocks right now instead of investing in resort real estate.

Michael Slevin, owner of Prudential Colorado Properties, said there are few enough sales of very expensive real estate to single out just a couple of factors. “Every sale is different,” Slevin said.

The bottom line, though, is that buyers and sellers haven’t reached a kind of equilibrium regarding the value of resort-area property, Slevin said.

“Buyers don’t have to buy, and sellers don’t have to sell,” Slevin said, adding that he’s confident that end of the market will eventually work itself out.

Full-time residents

The story is much different where most full-time residents live. Both Flaum and Slevin said Eagle and Gypsum in particular are very active right now, with homes selling quickly and values starting to come off the lows of 2009 and 2010.

The most recent quarterly data from Slifer Smith & Frampton reports that a townhome or condo in Gypsum spent just 15 days on the market before going under contract. In Eagle, a townhome or condo spent 73 days on the market.

Those quick sales are coming in at, or very near, sellers’ asking prices, and per-square-foot prices are rising, too.

Of course, prices in the lower valley fell, and fell hard, during the economic slump.

“There was a lot of pain involved in that, and that needs to be mentioned,” Slevin said.

On the other hand, the lower prices in the lower valley, combined with historically low interest rates, enabled buyers, especially first-time buyers, to get into the market.

Interest rates increase

Interest rates have started to come up in recent months, but Slevin said they remain very low. Still, Flaum said the recent increase in interest rates may be pushing more people into buying decisions.

Flaum said Eagle Ranch is particularly active right now, and estimated that prices may have come up as much as 20 percent off their depth-of-the-bust lows.

“That market has really changed in the last 12 months or so,” Flaum said.

Better still, there are fewer foreclosures and “short sales” — arrangements between lenders and borrowers to sell a home for less than is owed on the mortgage.

“We’re building a healthy market there, and we’re starting to build it up the valley,” Slevin said.

Vail Daily Business Editor Scott Miller can be reached at 970-748-2939 and at smiller@vail daily.com.

“Buyers don’t have to buy, and sellers don’t have to sell.” Michael Slevin, owner of Prudential Colorado Properties